No Women on Glencore’s Board Marks Mining Imbalance: Commodities

Mining lags behind every other industry, including oil and gas, in terms of gender diversity, with women occupying just 5 percent of board positions, according to a January report by Women in Mining U.K. and PricewaterhouseCoopers. Photographer: Jerome Favre/Bloomberg

Feb. 20 (Bloomberg) -- Glencore International Plc’s $36
billion takeover of Xstrata Plc will unite about 130,000
employees that operate in more than 40 countries. The proposed
board of directors doesn’t include a single woman.

Mining lags behind every other industry, including oil and
gas, in terms of gender diversity, with women occupying just 5
percent of board positions, according to a January report by
Women in Mining U.K. and PricewaterhouseCoopers. Of the seven
companies in the U.K.’s benchmark FTSE 100 Index with all-male
boards, five are miners. Four of the world’s five biggest mining
companies trade in London.

“If I chaired an all-male board I’d set to work
immediately getting some women on it,” said Mark Moody-Stuart,
a former chairman of both Royal Dutch Shell Plc and Anglo
American Plc, whose board appointed Cynthia Carroll as its first
woman chief executive officer. “I don’t think they really have
much of an excuse. It’s a matter of putting thought and effort
into it.”

Mining has long been seen as a male bastion, with women
banned from working underground in some countries until
recently. That’s being challenged by a growing skills shortage
amid unprecedented demand for natural resources. A strong
pipeline of women in senior management is ready to take the next
step to the boardroom, according to a lobby group, supported by
a proven correlation with higher profit margins.

Glencore Candidates

Antofagasta Plc, Kazakhmys Plc and Vedanta Resources Plc
join Glencore and Xstrata as mining companies with all-male
boards. Chemical maker Croda International Plc and Melrose
Industries Plc are the two other members of the FTSE 100 Index
without female board members.

Glencore said a search process for a female director had
identified potential candidates before being held up by the deal
with Xstrata to create the world’s fourth-largest mining
company.

“The appointment of a female board director is a
significant consideration and will be an important area of focus
for the new nominations committee,” the company said in a
statement.

Glencore fell 2.5 percent to 382.35 pence by the close in
London. Xstrata also declined 2.5 percent to 1,148.5 pence.

U.K. Prime Minister David Cameron has urged companies to do
more to promote women to board level, although his government
has ruled out imposing quotas. A 2011 report by Mervyn Davies, a
former banker, called for a target of 25 percent female
representation at the biggest businesses.

‘Blokey’ Culture

There is “a long way to go,” Cameron said in Mumbai on
Jan. 18, according to the Press Association. “If you look at
the top businesses in Britain, there still aren’t nearly enough
women in the boardroom.”

Men-only boards project a “blokey” culture that is
damaging to the reputation of companies, said Fiona Hathorn,
managing director of Women on Boards U.K., which campaigns to
improve gender equality. “Those companies that don’t have women
on their boards, it really speaks volumes that they really don’t
believe women make a difference.”

Mixed boards can lead to better financial performance,
according to a 2012 report by Credit Suisse Group AG. The report
said that in the past six years, companies with a market value
of more than $10 billion, with at least one woman on the board,
outperformed those with all-male boards in terms of share-price
performance. Mixed boards also had a higher return on equity,
lower gearing and better average growth, the report showed.

Anglo’s Ratio

Anglo American has the highest percentage of women on its
board among London’s biggest miners with 18 percent, according
to data compiled by Bloomberg.

Carroll, the first woman, external hire and non-South
African to run Anglo, said in October she would stand down. The
mining company had lost almost a quarter of its value during her
five-year tenure. Carroll’s departure in April will leave no
U.K. miner with a female CEO and only two companies in the
U.K.’s FTSE Index headed by a woman.

The board of BHP Billiton Ltd., the world’s biggest miner,
is 15 percent female, while Rio Tinto Group has 14 percent.
Anglo, Kazakhmys and Glencore all have more than 20 percent of
women in management positions, according to Bloomberg data.

The U.K.’s Business Secretary Vince Cable, whose department
is responsible for economic growth, wrote to the chairmen and
CEOs of the seven companies without female board members last
month, urging them to take action to redress the balance. Doing
nothing is “not an option anymore,” according to Cable, who
said he wanted to see the end of all-male boards by 2015.

Changing Boards

The number of all-male boards in the FTSE 100 Index of
leading U.K. shares has fallen from 21 in 2010, Cable said.
While he recognized that some industries, especially mining, had
“unique challenges” in diversifying their boards, partly
because of the frequent travel and project work involved, that
was no longer an excuse.

“Having more women on your board is a show of better
corporate responsibility generally,” said Amanda Van Dyke,
chairwoman of Women in Mining, a non-profit group that promotes
women in the industry. “The skills required at the board level
are not only operational and technical, they are also business
skills.”

Of the top 500 mining companies surveyed in a January
report by Van Dyke’s group, the 18 with 25 percent or more of
their board made up of women had an average profit margin for
the 2011 financial year that was 49 percent higher than the
total.

Diversity ‘Fundamental’

For every two women directors there are three women in
executive management positions, the report found. Their growing
experience may eventually lead them to a place on the board, it
said.

“Diversity is absolutely fundamental to the efficient
operation of a global company,” said Moody-Stuart, who along
with Carroll also appointed Maria Silvia Bastos Marques and
Mamphela Ramphele to the Anglo board during his chairmanship. He
said the additions improved the company’s board, changed the
nature of discussions and led to greater cooperation.

Xstrata declined to comment when asked about the lack of
women on its board. The company said in its 2011 annual report
that it told executive search firms to include “suitable female
candidates” on any shortlist for new non-executive directors.
The company said at the time it hoped to welcome a female
director to its board in “due course.”

‘Need, Merit’

Kazakhmys, the biggest copper producer in Kazakhstan, said
the selection of board members “must be driven by professional
need and merit.”

Antofagasta, the copper producer controlled by Chile’s
Luksic family, says in its annual report that it will ensure
board appointments “are made on merit, taking into account the
benefits of diversity including gender diversity.”

Vedanta referred to a 2011 statement where it said it
“aspires to have 25 percent of women on the board by 2015.”

“You have to believe in your head that it’s good for your
business to have women around, as if the board doesn’t believe
it they won’t do anything,” said Hathorn. “They’re operating
in the 20th century, they need to get into the 21st.”